Reps probe alleged diversion of crude oil at Warri refinery

House of Representatives, Wednesday mandated its Committee on Petroleum (Upstream) to investigate an alleged diversion of crude oil meant for refining at Warri refining and petrochemical company in Delta State.

The Committee would also probe why the Nigerian National Petroleum Corporation, NNPC has allegedly failed, refused and or neglected to address the haulage challenges viz-a-viz inadequate storage tanks affecting the refining and petrochemical company to forestall the frequent shutting down of the refinery.

The resolution of the parliament was sequel to a motion titled “Urgent Need for the Re-Opening And Commencement of Operations of the Warri Refining and Petrochemical Company by Addressing the Haulage Challenges and Lack of Functional or Operational Storage Tanks Affecting the Refinery”, sponsored by Hon. Ben Rollands Igbakpa representing Ethiope Federal Constituency of Delta State.

Moving the motion, Igbakpa recalled that the Warri Refining and Petrochemical Company was mandated to produce refined product from mainly local crude.

According to him, the three main sections of the production department, namely: reforming, crude distillation and catalytic cracking units have operated more than the others from the sister refineries for the past 8 years due to the efforts of the permanent and support staffs of Warri refinery.

The reforming unit which operates between 75-80% through the output of its installed capacity produces reformate (also known as PMS) of 92-94 octane number through an internal blending process.

Igbakpa said that the Plants were operating at an output of around 115m3/hour which translates to about 68% installed capacity.

He said that products that were being supplied from the Refinery included: Premium motor spirit (PMS) or petrol; Automotive gas oil (AGO); Kerosene (DPK); LPG, Low pour fuel oil (LPFO) for ships and industrial fuel and Carbon Black.

The lawmaker said that the plant has been down due to mismanagement.

He said: “The House is disturbed that the refinery has been up and down due to top management decisions of the Nigerian National Petroleum Corporation (NNPC) to ground the plant for personal reasons of what they will gain from allowing to marketers constantly import product which they know can be produced within the refinery.

“The plant had severally shut down due to haulage challenges sequel to PPMC’s continued neglect in the evacuation of products. Also, the lack of functional or operational storage tanks and poor maintenance culture on the part of management also constitutes another reason the plant is not working.

“As efforts to ground the plant from refining products, some members of the top echelon of the Warri Refinery in collaboration with the Chief Operating Officer (COO) diverts crude meant for refining. Whenever crude oil is delivered from Escravous tank farm for the purpose of refining, the products are hoarded for a period of about 14 days and thereafter diverted through the refinery jetty to interested buyers (or specific companies they have special interests on) who pay less.

“The resultant effects of this perceived economic sabotage is that many times, the plant is brought down because no crude to refine as the crude has been diverted for their selfish gain.”

Igbakpa expressed worry that the management of the facility had abandoned their responsibilities of maintenance of the Plant, leaving the staff of the Refinery on several occasions contributing their personal monies to buy materials and tools to fix faulty equipment.

“Currently, most of the spherical tanks used for storage of Liquefied Petroleum Gas (LPG) have been leased out to Kwale Hydrocarbon Nigeria Limited (KHNL), a private company while other storage tanks are being leased out to private interests all in a bid to ensure that the Warri Refining and Petrochemical company remains shut down indefinitely, even when the said Refinery has the production capacity of 75 %.

“The Federal Government has officially confirmed the return of fuel subsidy, as the Petroleum Products Pricing Regulatory Agency (PPPRA) has on 11th March 2021 fixed the pump price of PMS also known as petrol, at N212.61 per litre, for the month of March, which the Minister of State for Petroleum Resources and NNPC have denied yet petroleum marketers sells between N175 – N200 depending on the location.

“This increase obviously is due to the shutdown of our local refineries creating the cost elements of the commodity which the PPPRA analyzed as comprising the addition to the ex-coastal price of average lightering expenses, NIMASA charges, jetty throughput charges, storage charge and average financing costs with the inclusion of retailers’ margin has now brought the pump price of the commodity to 212.61 per litre”, he said.

Proffering solutions, Igbakpa said they all that was required was routine maintenance to further improve the operating capacity of the refinery which the local manpower was capable of providing and have demonstrated the same over time so as to make the price of Premium Motor Spirit (PMS) more available and affordable.

“The commencement of local production will help to mitigate the incessant and upward price adjustment of petroleum products, ameliorate the hardship and inflation that comes with such exercise to Nigeria and Nigerians”, Igbakpa said.

Adopting the motion, the House asked the Committee to report back to it in 4 weeks for further legislative action.